The 1 man who wants the financial sector to follow the law

May 7, 2012 - Mike Maneval

A Harold Meyerson-penned profile of New York state Attorney General Eric Schneiderman examines not only the man who has taken the lead in fighting to reform the financial sector and insulate it from fraud and unscrupulous practices better, but some of what that fight has entailed.

Meyerson's article, at the website of the American Prospect, begins by detailing how financial giants processed foreclosures with little oversight, often on properties for which the financial entities' claims of ownership were dubious at best. Banks used the crisis in housing markets, Meyerson and Schneiderman maintain, to attempt to evade accountability for crimes committed in the housing bust - not only crimes related to attempts to foreclose on homes the holders of mortgages had fully paid on, but any and all crimes rooted in the bunding of sub-prime mortgages. Schneiderman found other states' attorneys general relunctant to press on criminal liability due to fears it would impede a drawdown of what holders of underwater mortgages would need to pay.

The states' attorneys general, Schneiderman notes, faced another obstacle as well: Many of the financial institutions had the resources necessary to exhaust any state or federal attempt to hold leaders responsible. "That's what 'too big to fail' means," an attorney working for Schneiderman told Meyerson.

Meyerson's profile goes on to examine how Schneiderman lobbied rank-and-file union members for support and activism, and how Schneiderman has faced pressure, not only from the financial sector but from the Democratic administration in the White House today, to prioritize pursuit of a large settlement in the scandal stemming from the lack of oversight in foreclosure rather than legal penalty for malfeasance. Schniederman already predicts, in Meyerson's words, that 'the pressure from the banks to limit the size and scope of the investigation will increase as it begins to turn up evidence of possible misconduct."